The market for lithium batteries is undergoing a rapid expansion as new applications demand higher densities of energy and power storage. Simple theoretical estimates show that lithium and lithium ion cells can reach specific energies of 880 and 500 W h kg–1 respectively. With an electrolyte conductivity above 3 × 10–4 S cm–1 and thickness below 0.01 cm, a power density of 300 W dm–3 can be obtained without excessive energy losses. Diffusion in porous or polymer composite electrodes is enhanced by an interpenetrating electrolyte provided the electrode particles are small. Batteries using transition metal oxide positive electrodes and carbon negative electrodes are expected to give practical specific energies up to 180 W. h kg–1 including packaging and other essential additional materials in the near future.